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BREAKING NEWS: Accenture to Cut 600 Jobs (Updated)

Another 800 cuts will come from a special sabbatical program.
Stephen TaubJune 7, 2001

So much for the denials.

Accenture announced Thursday that it will cut its staff by about 1,400, citing the economic slowdown and the company’s lowest personnel attrition rate in years.

Accenture said it will eliminate 600 jobs. In addition, up to 800 of the cuts will come from a special voluntary sabbatical program for consulting personnel, primarily in the United States.

Accenture currently employs more than 75,000 people globally.

If you recall, back on April 17, CFO.com reported that Accenture was planning to announce sizable layoffs.

Two days later, a company spokeswoman told CFO.com, “No layoffs are currently happening or are any being planned.”

The same spokeswoman said Thursday’s announced cuts came about because business conditions have changed since April.

In a press release, Accenture, formerly Andersen Consulting, said the sabbatical program, known as “FlexLeave,” will be offered to consulting personnel at the senior-manager level and below with more than 12 months of service.

The duration of the sabbaticals will range from six to 12 months. Consultants who choose to participate in FlexLeave will receive 20 percent of their salaries and continuation of their employer-provided benefits, including medical benefits.

To participate, employees must sign up by the end of June and start their sabbatical by September 1. Each person who opts to participate will have a guaranteed return date.

“This will give us the cushion we need during the economic slowdown,” says the spokeswoman.

The company benefits in many ways. Obviously, it saves 80 percent of salaries. It also savies money when the participants return. Had it simply canned these people and then staffed up again, it would need to spend a sizable sum on recruitment and training.

The company said that employees who choose to take advantage of FlexLeave before Accenture’s expected initial public offering will still participate in any equity awards that may be granted in connection with the IPO, in the same manner as similarly situated full- time employees not participating in the program.

“While we had hoped to avoid making any workforce reductions, even temporary ones, the current economic climate and our lower-than-usual attrition levels have created a modest imbalance between the demand for our services and our current staffing levels,” said Joe W. Forehand, Accenture managing partner and CEO, in the press release. “The FlexLeave program will enable us to balance the skill sets and geographic mix of our workforce and trim costs in the short term, while retaining the highly skilled and talented people we have recruited and trained. In addition, the reductions in some support positions will enable us to maximize operational efficiencies.”

Forehand also said that because of Accenture’s continued growth overall and the increase in its European-based business, the company would have a net increase in total headcount for the year of at least 9,000 people.

What will the company do if much fewer than 800 people volunteer for sabbaticals? Responds the spokeswoman, “Talk to me in two weeks.”

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